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'  By  J,  K.  UPTON.  . 

Assistant  Secretary  of  the  Treasury  under  Secretaries  Sher* 
manj  Windom  and  Folger.  Financial  Statistician  of  the 
Eiv>enth  C<n,ui ,  Author  of ‘♦Money  in  Politics.** 


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A  COIN  CATECHISM 


BY 


J.  K.  UPTON 

Assistant  Secretary  of  the  Treasury  under  Secretaries 
Sherman,  Windom  and  Folger.  Financial  Statis¬ 
tician  of  the  Eleventh  Census,  and  Author 
of  “  Money  in  Politics.” 

4  • 

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aw**  “ST 


CHICAGO  NEW  YORK 

THE  WERNER  COMPANY 
1895 


Copyright  1895 
J.  K.  UPTON 


A  Coin  Catechism 


34635 


A  COIN  CATECHISM. 


1.  What  are  coins? 

Pieces  of  metals,  usually  disks, 
stamped  by  the  government  issuing 
them  for  circulation  as  money. 

2.  What  metals  are  used  for  this 

« 

purpose? 

Mainly  silver  or  gold,  but  each 
metal,  when-  used,  has  with  it  a 
fixed  amount  of  a  baser  metal  known 
as  alloy,  not  to  depreciate  its  value 
but  to  toughen  and  harden  it  that 
the  coins  made  therefrom  may  be 
better  adapted  to  circulation. 

3.  Why  are  the  coins  stamped? 
To  certify  that  they  contained 

when  minted  the  weight  and  fine- 


6 


A  COIN  CATECHISM. 


ness  required  by  law  for  pieces  of 
that  denomination. 

4.  Why  are  they  issued  by  the 
government  instead  of  by  private 
parties? 

Experience  has  shown  that  only 
in  this  way  can  a  uniformity  in 
weight  and  design  of  the  coin 
be  maintained — properties  essential 
to  check  the  issue  of  spurious 
pieces. 

5.  Are  coins  the  only  forms  of 
money? 

Yes,  of  so-called  primary  mon¬ 
ey,  but  bank  bills,  Treasury  notes, 
checks,  drafts,  etc.,  fulfill  all  the 
functions  of  money.  They  repre¬ 
sent,  however,  rather  than  possess 
value  and  are  only  more  convenient 
and  less  expensive  methods  of  effect¬ 
ing  exchanges  than  the  metallic 
money  which  they  represent. 


A  COIN  CATECHISM. 


7 


6.  What  is  meant  by  “method  of 
effecting  exchanges”? 

The  method  employed  to  enable 
the  possessor  of  a  commodity  he 
does  not  need  and  is  willing  to  part 
with  to  exchange  it  for  one  that  he 
does  need  and  is  willing  to  accept 
in  exchange. 

7.  How  does  money  do  this? 

In  the  morning  you  find  you  must 
have  a  breakfast,  and  you  go  to  the 
butcher’s  and  get  from  him  a  beef¬ 
steak,  paying  him  therefor  a  dollar 
of  money.  The  butcher  wants  a 
a  knife  and  he  gets  one  of  the  cutler, 
giving  him  in  exchange  the  dollar 
you  paid  him  for  the  steak.  The 
cutler  needs  a  hat  and  he  gets  one 
of  the  hatter,  parting  with  this  dol¬ 
lar  therefor,  and  the  hatter  wanting 
some  straw  comes  to  you,  a  farmer, 
and  gets  it,  paying  you  therefor  with 


8 


A  COIN  CATECHISM. 


the  same  dollar.  Thus  in  effect  you 
have  exchanged  some  straw  which 
you  did  not  need  for  a  steak  which 
you  did  need,  and  the  dollar  which 
brought  this  about  without  inconven¬ 
ience  to  you  is  again  in  your  pocket 
ready  for  similar  duty  to-morrow. 

8.  Could  not  this  exchange  have 
been  effected  without  the  interven¬ 
tion  of  money? 

Perhaps,  in  the  fullness  of  time 
you  might  have  found  somebody 
who  had  a  beefsteak  he  was  willing 
to  part  with  for  your  straw,  but  in 
hunting  for  him  you  would  probably 
have  lost  a  day’s  work,  become  very 
weary  and  probably  hungry  through 
delay,  but  by  the  use  of  money  all 
these  expensive  and  disagreeable 
incidents  were  averted. 

9.  Has  money  any  other  function 
than  to  facilitate  exchanges? 


A  COIN  CATECHISM. 


9 


Incidentally  it  becomes  a  stand¬ 
ard  by  which  the  value  of  all  com¬ 
modities  is  measured  and  in  the 
terms  of  which  all  values  are  ex¬ 
pressed.  Thus  we  measure  the  value 
of  wheat  at  so  much  money  per  bush¬ 
el,  lumber  so  much  per  square  foot, 
land  so  much  per  acre,  all  in  the 
terms  of  one  standard,  and  we  can 
then  easily  reckon  at  what  rate  one 
product  or  holding  can  be  ex¬ 
changed  for  another. 

10.  Is  this  rate  uniform  from 
day  to  day? 

No,  it  is  continually  changing. 

11.  Who  determines  this  rate? 

The  holders  of  the  articles  to  be 

exchanged. 

12.  Then  the  government  has 
nothing  to  do  with  it? 

Nothing  whatever.  It  fixes  the 
weight  of  metal  in  the  coin,  but  it 


10 


A  COIN  CATECHISM. 


cannot  say  to  the  holder  of  wheat, 
“  You  shall  part  with  it  for  a  certain 
amount  of  such  coin.”  Such  a 
scheme  has  been  tried  but  always 
without  the  desired  effect.  In  this 
country  nobody  to-day  desires  that 
the  exchange  rate  of  money  for  com¬ 
modities  be  determined  by  the  gov¬ 
ernment  even  if  such  a  plan  were 
possible. 

13.  By  what  is  the  holder  guided 
in  fixing  the  rate  ? 

His  necessities,  mainly,  but  to  a 
limited  extent  by  his  judgment  or 
caprice. 

14.  Then  if  the  government  has 
nothing  to  do  with  fixing  the  rate  at 
which  products  shall  be  exchanged, 
what  further  action  need  it  take  in 
reference  to  money  ? 

None  at  all.  Money  once  estab¬ 
lished  and  issued  should  be  let  alone 


A  COIN  CATECHISM. 


11 


if  its  work  is  to  be  done  fairly  and 
without  hindrance. 

15.  But  the  government  does  in¬ 
terfere  with  its  operations  some¬ 
times,  does  it  not  ? 

Yes,  frequently,  but  always  with 
detriment  to  somebody. 

16.  In  what  way  does  it  interfere? 

It  steps  in  and  says  that  coins 

shall  have  an  increase  or  decrease  in 
weight  or  fineness,  but  shall  still  be 
received  in  payment  of  a  debt  the 
same  as  the  coins  in  existence  when 
the  contract  was  made,  and  some 
times  it  goes  so  far  as  to  say  that 
something  else  entirely  different 
shall  be  accepted  in  satisfaction  of  a 
debt  whether  the  creditor  is  willing 
or  not. 

17.  Have  such  interferences  ever 
occurred  in  this  country  ? 

Yes.  In  colonial  days  a  Spanish 


12 


A  COIN  CATECHISM. 


silver  coin  known  as  a  dollar  came 
largely  into  circulation.  The  British 
mint  ascertained  and  declared  that 
the  piece  contained  the  same  amount 
of  silver  as  did  54  pence,  or  4s  6d 
of  English  money.  Yet  the  Virginia 
colony  declared  by  law  that  the 
piece  contained  6  shillings.  So  did 
the  Massachusetts  colony.  The 
New  York  and  Maryland  colonies 
declared  that  the  piece  contained  8s; 
Pennsylvania  7s  6d;  South  Carolina 
alone  declared  that  the  piece  con¬ 
tained  just  what  it  did,  4s  6d. 

18.  What  was  the  object  of  such 
false  declarations  ? 

Among  the  more  northern  col¬ 
onies  there  were  many  loans  and 
other  obligations  existing  calling  for 
“shillings.”  By  making  the  dollar 
pay  more  debt  than  the  weight  of 
the  metal  would  warrant  the  creditor 


A  COIN  CATECHISM. 


13 


was  deprived  of  the  difference — in 
New  York  and  Maryland  about  45 
per  cent  of  the  obligation. 

19.  That  might  happen  in  a  com¬ 
munity  imperfectly  organized  into  a 
government,  but  could  it  occur 
under  our  constitution? 

Well,  in  1862  the  government  of 
the  United  States  authorized  paper 
promises  in  the  form  of  notes,  silent 
as  to  the  time  of  their  redemption, 
to  be  equal  in  debt-paying  power  to 
the  metallic  money  they  represented, 
though  at  timej  the  promises  were 
worth  in  current  exchange  less  than 
one-half  as  much  as  the  coin  itself. 

20.  Did  the  courts  sanction  such 
an  infringement  upon  private  rights? 

Yes,  the  Supreme  Court  of  the 
United  States  held  that  the  national 
government  by  its  inherent  power 
of  sovereignty  had  a  right  to  change 


14 


A  COIN  CATECHISM. 


the  terms  of  all  contracts  whenever 
the  law  making  power  deemed  such 
a  change  necessary  for  the  welfare 
of  the  country.  The  law  making 
power,  however,  would  probably  hes¬ 
itate  in  taking  any  steps  of  this  kind 
except  the  nation  was  in  dire  dis¬ 
tress  or  its  existence  was  threatened. 

2i.  Does  such  a  change  of  stand¬ 
ard  affect  prices  ? 

Yes.  If  the  standard  is  reduced 
prices  will  have  a  corresponding 
rise;  if  increased,  prices  will  be  cor¬ 
respondingly  lower,  so  that  in  cur¬ 
rent  transactions,  after  prices  have 
become  adjusted  to  the  new  standard, 
there  is  no  marked  loss  or  gain  to 
either  party  to  the  exchange  through 
a  change  in  the  value  standard.  It 
is  only  when  the  change  applies  to 
contracts  already  existing  that  a 
wrong  is  made  possible.  It  is  in 


A  COIN  CATECHISM. 


15 


making  money  of  a  new  and  differ¬ 
ent  standard  a  legal  tender  by  law 
for  pre-existing  debts  that  the  mis¬ 
chief  chiefly  occurs.  If  the  law 
would  give  no  function  to  money 
that  it  did  not  naturally  possess  in 
the  world  of  trade  where  it  belongs 
there  would  be  no  monetary  evils  to 
remedy,  no  money  question  to  dis¬ 
cuss  in  congress  or  to  be  considered 
in  convention. 

22.  How  much  money  should 
there  be  in  circulation  ? 

Just  enough  to  meet  the  demands 
of  trade;  no  more  and  no  less. 

23.  How  can  that  amount  be 
ascertained  ? 

By  leaving  its  circulation  to  be 
fixed  by  the  demand  therefor  just  as 
the  supply  of  provisions,  fuel  or 
clothing  is  determined  and  not  by 
arbitrary  law. 


16 


A  COIN  CATECHISM. 


24.  What  is  meant  by  cheap 
money  ? 

There  can  be  no  such  thing, 
strictly  speaking,  as  cheap  money. 
As  the  term  is  generally  used  it 
means  an  abundance  of  money  in 
circulation,  but  that  abundance  de¬ 
pends  not  upon  the  amount  of  money 
available  but  upon  the  demand  for 
it  that  any  community  can  create 
by  stimulating  trade.  It  may  mean 
a  low  loaning  rate,  the  abundance  or 
“plenty”  of  money  arising,  not  from 
an  increase  of  circulation,  but 
from  unemployed  capital  for  which 
the  owner  is  willing  to  accept  a 
lower  rate  of  interest  rather  than 
have  it  entirely  unremunerative, 
but  the  amount  of  money  in  cir¬ 
culation  has  little  if  anything  to 
do  in  bringing  about  such  a  con¬ 
dition. 


A  COIN  CATECHISM. 


17 


25.  Then  simply  increasing  the 
money  supply  does  not  make  money 
easy  ? 

Not  at  all.  A11  accumulation  of 
wealth  and  a  confidence  in  the  abil¬ 
ity  of  the  borrower  to  repay  his 
loans  at  maturity  are  the  principal 
elements  of  an  c  ‘  easy  ”  money  mar¬ 
ket.  In  England,  which  has  a  per 
capita  of  circulation  30  per  cent  less 
than  we  have,  the  borrowing  rate  is 
only  \]/2  per  cent  per  year,  while 
here  it  is  double  that  amount;  but 
in  England  there  is  relatively  a 
greater  amount  of  unemployed  cap¬ 
ital  seeking  investment,  and  conse¬ 
quently  interest  rates  are  lower  or 
money  cheaper.  Evidently  the 
amount  of  circulating  medium  has 
nothing  to  do  with  bringing  about 
such  a  condition. 

26.  Then  legislation  cannot,  by 


18 


A  COIN  CATECHISM. 


attempting  to  force  a  circulation, con¬ 
trol  prices  or  make  money  cheaper  ? 

Not  in  the  least.  The  forced 
issues  of  our  civil  war,  in  effect,  only 
depreciated  the  value  of  the  cur¬ 
rency  outstanding,  so  that  there  was 
little  increase  in  its  aggregate  value 
measured  by  gold;  prices  were  of 
course  correspondingly  increased.  If 
for  any  reason  there  should  be  a 
forced  decrease  in  the  amount  of 
currency,  what  remained  of  such 
currency  would,  without  doubt,  in¬ 
crease  in  purchasing  power  suffi¬ 
ciently  to  meet  the  demands  of  trade 
in  making  exchanges,  prices  being 
correspondingly  depressed.  The 
only  thing  for  the  law  to  do  is  to 
leave  the  amount  of  money  to  the 
demands  of  trade  as  before  stated, 
which  will  take  care  that  it  be  suffi¬ 
cient  and  never  redundant. 


A  COIN  CATECHISM. 


19 


27.  Should  not  the  law  fix  the 
weight  of  the  standard  coins  ? 

It  should,  just  as  it  fixes  the 
weight  of  a  bushel  of  wheat,  and  to 
the  same  end  that  there  shall  be  no 
misunderstanding  of  the  amount  in¬ 
volved  between  the  buyer  and  the 
seller. 

28.  Did  the  Colonial  or  Confeder¬ 
ate  Congress  attempt  to  establish 
any  standard  of  value  for  the  coun¬ 
try  ? 

Only  this:  The  Congress  of  the 
Confederation,  in  1785,  adopted  the 
Spanish  silver  dollar  as  the  ideal 
unit  of  value,  which  piece  had  al¬ 
ready  been  accepted  as  a  unit  in 
nearly,  if  not  all  the  colonies,  and 
the  following  year,  declared  that  the 
piece  in  question  contained  375.64 
grains  of  pure  silver,  and  authorized 
the  coinage  of  the  gold  eagle  to  con- 


20 


A  COIN  CATECHISM. 


tain  246.268  grains  of  fine  gold,  and 
in  both  cases  fractional  pieces  of 
proportional  weight,  but  before  a 
mint  could  be  put  into  operation 
the  Constitution  was  adopted  and 
no  coins  were  issued  under  the  act. 

29.  What  standard  of  value  was 
first  established  under  the  Constitu¬ 
tion  of  this  country  ? 

The  first  Congress  of  the  United 
States  provided  for  the  coinage  of 
“silver  dollars  or  units,  each  to  be 
the  value  of  a  Spanish  milled  dollar 
as  the  same  is  now  current,  and  to 
contain  371.25  grains  of  pure  silver,” 
and  fractional  pieces  of  the  same 
fineness  and  proportional  weight, 
and  gold  pieces  to  contain  24.75 
grains  of  pure  gold  to  a  dollar,  all 
of  the  pieces  to  be  a  full  legal  tender 
in  payment  of  debts  and  to  be 
coined  at  the  mint  for  depositors  of 


A  COIN  CATECHISM. 


21 


bullion  of  either  metal  free  of 
charge.  Under  the  rates  established, 
one  dollar  in  silver,  it  will  be  seen, 
weighed  just  fifteen  times  more  than 
one  dollar  in  gold,  and  such  was  the 
ratio,  15  to  1,  the  law  declared 
should  exist  in  all  the  coining  opera¬ 
tions  of  the  mint. 

30.  Why  was  the  ratio  of  15  to  1 
established  ? 

Because  it  was  thought  that  in 
the  market  fifteen  pounds  of  silver 
was  worth  one  pound  of  gold,  and 
that  the  plan,  if  adopted,  would  se¬ 
cure  the  use  of  both  metals  for  cir¬ 
culating  purposes. 

31.  Was  15  to  1  the  market  rate 
between  the  metals  in  1792,  and  did 
it  continue? 

It  was  very  near  it  then  and  varied 
a  little  from  it  for  several  years,  but 
the  rate  or  difference  slowly  in- 


22 


A  COIN  CATECHISM. 


creased  so  that  in  twenty  years  it  was 
1 6  to  i,  but  it  subsequently  decreased 
somewhat,  though  not  returning  to 
the  original  ratio  of  15  to  1. 

32.  What  was  the  effect  of  this 
increase  ? 

No  gold  came  to  the  mint  for 
coinage  with  a  view  to  circulation. 
A  holder  of  gold  bullion  worth  to 
him  at  the  mint  $10,000  in  gold 
coin  could,  while  on  his  way  to  that 
institution,  trade  it  off  to  bullion 
dealers  for  silver  enough  to  yield 
him  at  the  mint  $10, 200  in  silver 
coins,  just  as  good  to  pay  debts  with 
as  the  gold  coin,  and  he  naturally 
traded  his  gold  for  silver,  reaping 
the  benefit  of  the  exchange. 

33.  But  the  reports  show  that 
the  mint  coined  considerable  gold 
under  the  ratio  in  question;  why 
was  this  ? 


A  COIN  CATECHISM. 


23 


Owners  of  gold  bullion  took  it 
to  the  mint  to  ascertain  its  value, 
as  it  cost  them  nothing  to  have  it 
converted  into  coin.  There  were 
no  private  refineries  in  the  United 
States  prior  to  1850. 

34.  How  do  you  know  that  the 
gold  did  not  go  into  circulation  ? 

First,  because  no  man  pays  his 
debts  in  the  dearer  money  when  he 
has  the  choice  in  two  kinds  for  the 
purpose.  Secondly,  the  Director  of 
the  Mint  in  1833  said  there  was  no 
demand  for  gold  coins  only  on  the 
day  that  some  packet  was  ready  to 
sail  for  a  foreign  port,  when  the 
coins  were  put  aboard  her  for  ship¬ 
ment.  Thirdly,  Hon.  Thomas  H. 
Benton  on  the  floor  of  the  Senate 
declared  in  1834  that  the  false  valu¬ 
ation  put  upon  gold  had  rendered 
the  mint,  as  far  as  the  gold  coinage 


24 


A  COIN  CATECHISM. 


was  concerned,  a  most  ridiculous 
and  absurd  institution.  “It  lias 
coined,”  he  said,  “and  that  at  a 
large  expense  to  the  United  States, 
2,262,717  pieces  of  gold  worth  $11,- 
852,890,  and  where  are  these  pieces 
now?  Not  one  of  them  to  be  seen; 
all  sold  and  exported.” 

35.  Did  our  silver  coins  furnish 
the  metallic  circulation  ? 

To  a  certain  extent.  But  in  1793 
Congress,  by  law,  had  made  the 
Spanish  dollar  referred  to,  also  its 
eighth  pieces  or  “reals,”  full  legal 
tender  in  payment  of  debt.  This 
Spanish  dollar  was  about  3  grains 
heavier  than  our  dollar  and  nothing 
was  to  be  gained  by  putting  it  into 
circulation.  A  little  would  be 
gained  by  having  it  coined  into  our 
dollar  and  consequently  it  was  de¬ 
posited  for  coinage.  Enterprising 


A  COIN  CATECHISM. 


25 


bankers  also  found  that  among  the 
unwary  Spanish  Americans  our  dol¬ 
lars  could  be  exchanged  for  the 
Spanish  pieces  at  par,  and  after  the 
exchange  Spanish  dollars  came  to 
our  mint  for  coinage,  thus  keeping 
the  mint  busy  at  no  little  expense 
to  the  government,  but  for  the  ex¬ 
clusive  benefit  of  bankers. 

36.  How  were  these  operations 
broken  up? 

President  Jefferson,  in  1806,  di¬ 
rected  the  suspension  of  the  coinage 
of  silver  dollars  by  the  following 
order,  issued  through  the  State  De¬ 
partment: 

“Department  of  State, 

May  1,  1806. 

*  ‘Sir  :  I11  consequence  of  a  represen¬ 
tation  from  the  director  of  the  Bank  of 
the  United  States,  that  considerable 
purchases  have  been  made  of  dollars 


26 


A  COIN  CATECHISM. 


coined  at  the  mint  for  the  purpose  of 
exporting  them,  and  as  it  is  probable 
fnrther  purchases  and  exportations 
will  be  made,  the  President  directs 
that  all  the  silver  to  be  coined  at  the 
mint  shall  be  of  small  denomination, 
so  that  the  value  of  the  largest  pieces 
shall  not  exceed  half  a  dollar.  I  am, 
etc.,  “James  Madison. 

“Robert  Patterson,  Esq., 

“Director  of  the  Mint.” 

37.  How  many  dollar  pieces  had 
been  coined  at  that  time  ? 

Only  1,433,457. 

38.  Were  any  more  of  those 
pieces  coined  under  the  ratio  of  15 
to  1  ? 

There  were  not,  the  coinage  of 
this  piece  not  being  resumed  until 
1836. 

39.  Did  the  fractional  silver  pieces 
continue  to  be  coined  for  circula¬ 
tion  ? 


A  COIN  CATECHISM. 


27 


Their  coinage  continued,  but  be¬ 
ing  full  weight  pieces,  only  a  small 
portion  of  them  ever  came  into  cir¬ 
culation.  Those  not  exported  were 
largely  hoarded  by  the  banks  situ¬ 
ated  at  seaport  towns  where  their 
shipment  could  promptly  be  made 
at  any  time.  The  report  of  the 
House  Committee,  which  investi¬ 
gated  coinage  matters  in  1832,  states 
that  to  1830  there  had  been  a  total 
coinage  at  the  mint  of  $37,000,000, 
of  which  four-fifths  had  been  ex¬ 
ported,  leaving  in  circulation  only 
seven  or  eight  millions.  Most  of 
this  must  have  been  fractional  silver 
and  the  report  of  the  United  States 
bank  shows  nearly  that  amount  in 
its  vaults. 

40.  What  is  the  plan  called  under 
which  a  mint  coins  for  depositors 
all  gold  or  silver  bullion  presented 


28 


A  COIN  CATECHISM. 


for  the  purpose  upon  like  terms,  but 
at  a  fixed  relation  of  weight? 

Free  coinage  or  bimetallism.  ' 

41.  Then  am  I  to  understand  that 
under  forty  years  of  free  coinage  or 
bimetallism  in  the  United  States, 
less  than  $8,000,000  of  coin,  and 
that  mainly  fractional  silver,  was  in 
circulation  ? 

That  is  the  net  result  as  shown  by 
the  official  reports. 

42.  Was  this  failure  to  secure  a 
coin  circulation  wholly  due  to  the 
scheme  of  bimetallism  as  established 
in  the  act  of  1792  ? 

The  establishing  of  a  ratio  of  15 
to  1  by  that  act  undervalued  gold 
and  consequently  kept  that  metal 
out  of  circulation.  Our  silver  coins 
might  have  come  into  use  but  for 
the  legalizing  of  the  worn  out 
Spanish  pieces  in  1793.  Taking 


A  COIN  CATECHISM. 


29 


the  two  acts  together  the  effort  of 
the  country  to  provide  coin  for  cir¬ 
culation  of  any  kind  was  a  dismal 
failure. 

43.  What  steps  if  any  were  taken 
by  Congress  to  remedy  this  condi¬ 
tion  ? 

Instead  of  repealing  the  act  legal¬ 
izing  the  circulation  of  some  of  the 
foreign  coins  by  which  a  supply  of 
our  silver  would  have  circulated,  the 
House,  upon  the  recommendation  of 
a  special  committee,  brought  for¬ 
ward  the  proposition  to  make  the 
legal  ratio  15  5-8  to  1  instead  of  15 
to  1,  hoping  in  this  way  to  catch 
the  market  rate  and  bring  both 
metals  into  circulation.  But  in  the 
Senate  a  bill,  supported  by  the  ad¬ 
ministration,  and  championed  by 
Senator  Benton,  fixed  the  ratio  at 
about  16  to  1,  the  gold  coins  to  be 


30 


A  COIN  CATECHISM. 


reduced  in  weight  about  7  per  cent, 
and  it  passed  with  small  opposition. 

44.  What  was  the  market  rate  at 
that  period  ? 

About  the  rate  fixed  by  the  House 
bill,  15  5-8  to  1. 

45.  Then  if  16  to  1  should  be 
substituted  would  not  silver  be  un¬ 
dervalued  and  not  come  into  circu¬ 
lation  as  in  the  case  of  gold  under 
the  ratio  of  15  to  1  ? 

Certainly,  and  the  projectors  of 
the  measure  knew  it. 

46.  What  became  of  the  Senate 
bill? 

The  House  adopted  it  in  lieu  of 
its  own  bill  and  on  June  28,  1834,  it 
became  a  law  approved  by  Andrew 
Jackson,  President. 

47.  Was  it  the  purpose  of  the 
friends  of  this  measure  to  thus  de¬ 
monetize  silver? 


A  COIN  CATECHISM. 


31 


Ostensibly  their  purpose  was  to 
get  rid  of  the  United  States  bank 
with  its  $13,000,000  of  circulating 
notes ;  in  that  case  other  circulating 
medium  to  take  the  place  of  the 
bank  notes  must  be  devised  and  gold 
coin  seemed  most  available  for  that 
purpose. 

48.  Then  the  change  to  a  gold 
basis  was  not  especially  to  get  rid  of 
silver  ? 

Probably  not,  but  whatever  the 
purpose,  silver  was  taken  out  of 
circulation  under  the  operation 
of  the  new  ratio  as  effectually  as 
if  its  further  coinage  had  been 
prohibited  under  the  penalty  of 
death,  and  those  voting  for  the 
measure  understood  that  such  would 
be  the  result,  and  when  it  came 
they  did  not  plead  ignorance  or 
refer  to  the  act  as  the  crime  of  1834. 


32 


A  COIN  CATECHISM. 


49.  Did  silver  cease  to  be  coined? 

Yes,  for  circulation,  but  holders 

of  silver  bullion  still  had  it  treated 
at  the  mint  to  get  it  into  good  form 
for  the  market  just  as  holders  of 

gold  bullion  had  done  under  the 

• 

ratio  of  15  to  1  and  that  is  why  the 
coinage  of  silver  pieces  was  conti¬ 
nued  at  the  mint. 

50.  Did  gold  come  into  use  under 
the  new  ratio  ? 

Our  own  gold  coins  soon  came 
into  circulation  but  not  to  the  ex¬ 
clusion  of  the  much-berated  bank 
notes  as  hoped  and  apparently  anti¬ 
cipated.  The  gold  coins  were  now 
so  much  reduced  in  weight  that  even 
some  of  the  worn  foreign  silver  pieces 
were  worth  more  in  the  market  than 
for  circulation  and  only  the  thinnest 
of  them  remained.  The  heavier  ones 
with  our  dollars,  halves,  quarters  and 


A  COIN  CATECHISM. 


33 


dimes,  fresh  and  plump  from  the 
mint,  left  the  country,  which  became 
much  embarrassed  from  lack  of  small 
coins  to  meet  the  demands  of  trade. 

51.  What  action  if  any  was  taken 
by  Congress  to  grant  relief  from  this 
stringency  ? 

In  1852  the  Finance  Committee 
of  the  Senate,  of  which  R.  M.  T. 
Hunter  was  Chairman,  proposed  a 
measure  to  that  end  based  upon  one 
which  for  many  years  had  been  in 
successful  operation  in  England.  It 
provided  that  the  Secretary  of  the 
Treasury  should  purchase  silver 
bullion  as  needed  and  should  coin  it 
into  halves,  quarters,  dimes  and  half 
dimes  of  such  weight  that  one  dol¬ 
lar  of  them  in  value  should  weigh 
384  grains  of  standard  silver, 
whereas  their  former  weight  was 
412  fA  grains  to  a  dollar,  a  reduction 


34 


A  COIN  CATECHISM. 


of  about  7  per  cent.,  the  new  coins  to 
be  issued,  however,  only  in  exchange 
at  their  face  value  for  gold  coins  or 
silver  dollar  pieces,  the  weight  of 
which  remained  unchanged,  and  to 
be  a  legal  tender  for  not  more  than 
$5.  In  this  way  it  was  thought  the 
fractional  silver  pieces  would  stay 
in  circulation,  and  the  bill  with 
little  opposition  became  a  law  Feb¬ 
ruary  21,  1853. 

52.  Why  would  the  new  pieces 
remain  in  circulation  better  than 
those  of  full  weight  ? 

Because  they  had  been  purposely 
made  light  that  their  face  value 
should  be  greater  than  their  bullion 
value,  thus  preventing  their  melting 
or  exportation. 

53.  But  if  made  of  less  bullion 
value  than  the  gold  coins,  dollar  for 
dollar,  was  there  not  danger  that 


A  COIN  CATECHISM. 


35 


they  would  drive  gold  from  circula¬ 
tion  as  did  the  silver  coins  under 
the  ratio  of  15  to  i  ? 

No,  because  their  coinage  was  not 
made  free  to  depositors.  Only  such 
an  amount  was  issued  as  could  be 
exchanged  at  par  for  the  coins  of  a 
higher  value,  and  consequently  the 
issue  never  exceeded  the  demand  for 
use  in  making  change  and  in  petty 
payments.  Nobody  would  buy  them 
for  exportation  as  bullion.  Shippers 
could  do  better  with  bullion  dealers. 

54.  Were  the  results  satisfactory  ? 

Eminently  so,  especially  when 
three  years  later  the  foreign  silver 
pieces  were  made  redeemable  at  a  rate 
somewhat  above  the  market  value, 
by  which  they  disappeared  from  cir¬ 
culation.  The  country  then  had 
for  the  first  time  in  its  history  its 
own  gold  and  silver  coins  circula- 


36 


A  COIN  CATECHISM. 


ting  side  by  side,  ample  in  amount, 
throughout  the  country,  neither 
driving  the  other  from  circulation 
or  skulking  because  foreign  coins 
were  treated  better  in  law  than 
they  were. 

55.  Did  this  act  in  any  way  affect 
the  standard  of  value? 

Not  in  the  least.  It  did  not  take 
away  the  right  to  coin  the  silver 
,  dollar  for  depositors,  thus  retain¬ 
ing  the  double  standard  before  exist¬ 
ing,  but  it  did  prohibit  the  future 
coinage  of  fractional  silver  except 
on  government  account. 

56.  What  are  pieces  thus  coined 
only  on  government  account  called  ? 

Subsidiary  coins. 

57-  Tt  is  alleged  that  in  1852 
there  was  in  circulation  a  large 
amount  of  foreign  silver;  is  that 
true  ? 


A  COIN  CATECHISM. 


37 


No,  the  contrary  is  shown  by  the 
current  history  of  the  times,  the 
memory  of  thousands  of  men  now 
living,  the  discussions  in  Congress, 
and  especially  by  the  petition  to 
Congress  of  the  governor  and  mem¬ 
bers  of  the  New  Jersey  legislature 
in  that  year,  as  follows: 

“  To  the  Senate  and  House  of  Represen¬ 
tatives  of  the  United  States  in  Con¬ 
gress  Assembled: 

“The  memorial  of  the  subscribers 
respectfully  represents,  that  the  greatly 
increased  value  of  silver  compared  with 
that  of  gold  as  regulated  by  law,  at 
the  mint  of  the  United  States,  has 
almost  wholly  withdrawn  all  the  silver 
coins  of  proper  weight  from  circulation 
as  a  currency.  They  are  no  longer  a 
standard  of  value  in  payment,  and  are 
only  used  as  an  article  of  commerce. 

“Your  honorable  bodies  are  fully 
aware  that  the  ordinary  business  of  the 
community,  comprising  probably 


38 


A  COIN  CATECHISM. 


ninety-nine  hundredths  of  all  individ¬ 
ual  transactions,  cannot  be  conducted 
without  small  coins,  or  paper  tokens, 
to  settle  small  balances;  and  however 
repugnant  the  use  of  such  paper  trash 
may  be  to  the  public  opinion,  or  dis¬ 
creditable  to  the  government  and 
nation,  the  indispensable  necessity  for 
it  will,  as  your  memorialists  seriously 
apprehend,  soon  force  it  upon  the 
whole  country,  unless  Congress  shall, 
during  the  present  session,  provide  an 
efficient  remedy. 

“Your  memorialists  believe  that 
such  a  remedy  may  be  found  in  the 
passage  of  a  bill  that  passed  the  Senate 
of  the  United  States  at  their  last  ses_ 
sion,  which  proposes  a  silver  coinage 
about  seven  per  cent  lighter  than  the 
present  coin,  comprising  all  the  exist¬ 
ing  denominations  less  than  one  dollar, 
and  making  these  new  coins  a  legal 
tender  only  for  payments  not  exceed¬ 
ing  five  dollars.’ ’ 

58.  What  was  the  total  amount 
and  the  character  of  money  in  cir¬ 
culation  in  i860? 


A  COIN  CATECHISM. 


39 


According  to  an  estimate  of  the 
Secretary  of  the  Treasury  the 
amount  was  $435,000,000,  of  which 
$180,000,000  is  known  to  have  been 
represented  by  bank  notes,  leaving 
$255,000,000  of  coin.  This  coin 
was  admittedly  made  up  of  our  gold 
and  subsidiary  coinage,  of  which 
the  latter  was  probably  not  above 
$43,000,000.  The  estimate  of  ag¬ 
gregate  specie  circulation  and  of  its 
division  between  gold  and  silver  at 
that  time  vary  somewhat,  but  in  no 
case  does  the  estimate  include  any 
silver  dollars  as  in  circulation. 

59.  How  long  did  the  gold  stand¬ 
ard  of  183.4  continue? 

Practically  only  until  1862.  Con¬ 
gress  in  that  year  authorized  the 
issue  of  legal  tender  notes,  as  before 
stated,  and  a  dollar  in  that  currency 
immediately  became  the  standard  of 


40 


A  COIN  CATECHISM. 


value,  the  unit  of  account,  and  the 
notes  the  basis  of  circulation,  though 
depreciated  below  their  face  value. 

60.  What  became  of  the  specie 
circulation  ? 

It  was  mainly  exported.  Public 
sentiment,  however,  on  the  Pacific 
coast  was  so  strong  against  the  em¬ 
ployment  of  the  depreciated  notes 
that  only  specie  continued  to  be 
used  in  that  locality,  and  enough 
remained  elsewhere  in  the  country, 
mainly  in  New  York  City,  to  pay 
interest  on  the  public  debt  and  cus¬ 
toms  dues,  both  of  which  remained 
payable  only  in  coin. 

61.  Did  even  the  subsidiary  coins 
disappear? 

Yes;  even  the  public  treasury  re¬ 
tained  of  them  less  than  $500,000, 
their  place  being  taken  in  circula¬ 
tion  by  fractional  notes. 


A  COIN  CATECHISM. 


41 


62.  Why  were  the  legal  tender 
notes  issued  ? 

Under  an  alleged  necessity  aris¬ 
ing  from  the  exigencies  of  the  Civil 
War. 

63.  How  long  did  they  continue 
as  a  unit  of  account  and  a  basis  of 
circulation  ? 

Until  January  1,  1879,  when  they 
were  brought  to  par  in  coin  by  their 
redemption  at  sight  in  gold  coin, 
an  event  known  as  the  resumption 
of  specie  payments. 

64.  Then  for  17  years  only  de¬ 
preciated  paper  furnished  the  circu¬ 
lation  of  the  country  ? 

Yes,  except,  as  stated,  on  the  Pa¬ 
cific  coast  and  for  certain  payments. 

65.  What  was  the  market  ratio 
of  silver  to  gold  when  this  resump¬ 
tion  took  place  in  1879? 

About  18  to  1. 


42 


A  COIN  CATECHISM. 


66.  Has  it  been  less  since  ? 

Very  little,  if  any,  and  it  is  now 

(1895)  over  30  to  1. 

67.  Has  gold  still  retained  its 
place  as  a  standard  since  1879? 

It  lias. 

68.  At  such  increased  ratio,  why 
did  not  silver  drive  it  from  circula¬ 
tion  ? 

Because  the  free  coinage  of  that 
metal  had  been  prohibited  by  law. 

69.  When  and  how  did  that 
occur  ? 

In  1873.  Congress  in  that  year, 
in  a  revision  of  the  mint  laws,  left 
out  any  authority  for  the  further 
coinage  of  the  silver  dollar  for 
depositors,  and  made  gold  alone  the 
monetary  standard,  25.8  grains  f« 
fine  to  a  dollar. 

70.  Was  this  step  taken  after  ma¬ 
ture  deliberation? 


A  COIN  CATECHISM. 


43 


It  was.  The  bill,  which  dealt  in 
various  matters  pertaining  to  the 
coinage,  was  originally  prepared  at 
the  Treasury  Department,  and  hav¬ 
ing  been  submitted  to  about  thirty 
gentlemen  throughout  the  country 
conversant  with  the  manipulation 
of  metals,  the  manufacture  of  coin¬ 
age  and  the  execution  of  existing 
laws  relating  thereto,  and  by  them 
thoroughly  revised,  it  was  sent  to 
Congress  by  Secretary  Boutwell, 
April  25,  1870.  It  was  printed 
thirteen  times  by  order  of  Congress; 
it  was  considered  during  five  differ¬ 
ent  sessions  of  the  Senate  and 
House,  the  debates  thereon  in  the 
Senate  occupying  66  and  in  the 
House  78  columns  of  the  Congres¬ 
sional  Globe ,  and  it  was  not  finally 
passed  until  February  12,  1873.  At 
no  time  did  the  bill  contain  any  pro- 


44 


A  COIN  CATECHISM. 


vision  for  the  free  coinage  of  the 
old  silver  dollar  of  412  ^  grains, 
or  of  any  other  silver  dollar.  The 
bill  as  it  passed  the  House  did 
provide  for  the  coinage  on  govern¬ 
ment  account  of  a  subsidiary  silver 
dollar  to  weigh  384  grains,  just  the 
weight  of  two  half  dollars,  and  to  be 
a  legal  tender  for  $5.00.  This  pro¬ 
vision  was  struck  out  in  the  Senate 
upon  recommendation  of  the  Com¬ 
mittee  of  Finance,  and  provision 
made  for  the  coinage  for  depositors 
at  their  expense,  of  a  silver  dollar  of 
420  grains,  to  be  known  as  a  trade 
dollar,  as  desired  by  the  silver  pro¬ 
ducing  states.  At  no  time  during 
the  three  years  the  bill  was  under 
consideration  was  any  proposition 
made  or  considered  in  Congress  to 
authorize  the  free  coinage  of  a  silver 
dollar  of  412^  grains. 


A  COIN  CATECHISM. 


45 


7 1.  Wliat  effect  did  this  act,  so 
far  as  it  prohibited  the  further  coin¬ 
age  of  silver  for  depositors,  have  at 
the  time  upon  the  monetary  circu¬ 
lation  of  the  country  ? 

None  whatever.  No  coins  of  any 
kind  were  then  in  general  circula¬ 
tion,  and  as  for  the  silver  dollar, 
none  ever  had  been  so  far  as  any 
record  shows  to-day. 

72.  But  has  not  the  passage  of  the 
act  been  termed  the  “Crime  of 
1873”? 

It  has. 

73.  By  whom  and  for  what  pur¬ 
pose  has  it  been  so  called  ? 

By  the  advocates  of  free  silver 
coinage  who  hoped  that  by  stigma¬ 
tizing  the  act  and  leading  the  public 
to  believe  that  it  was  passed  through 
Congress  surreptitiously  and  with¬ 
out  proper  consideration  they  could 


46 


A  COIN  CATECHISM. 


create  a  prejudice  in  the  public  mind 
that  would  lead  to  its  repeal  or  mod¬ 
ification. 

74.  Was  any  interest  injured  at 
the  time  by  making  gold  the  stan¬ 
dard  by  law  as  it  was  in  fact  and 
had  been  since  1834,  excepting,  of 
course,  the  period  of  inflated  paper  ? 

None  whatever.  It  made  no 
change  in  existing  conditions  then, 
and  with  the  market  ratio  of  silver 
to  gold  not  less  than  16  to  1  no 
change  would  ever  occur.  It  in  no 
way  reduced  the  amount  of  “pri¬ 
mary  money  ”  in  the  country — or  in 
the  world. 

75.  When  was  the  alleged  mis¬ 
chief  discovered  ? 

I11  1876,  when  silver  had  so  fallen 
in  price  as  against  gold  that  it  was 
the  cheaper  metal  at  the  ratio  of 
16  to  1.  As  resumption  of  specie 


A  COIN  CATECHISM. 


47 


payments  had  been  ordered  on  and 
after  January  i,  1879,  it  was  seen 
that  silver,  if  it  had  not  been  pro¬ 
hibited,  would  again  be  the  unit  of 
account,  the  dollar  the  principal 
coin  in  circulation  and  gold  cease  to 
be  employed  as  a  primary  money, 
as  silver  had  been  since  1834. 

76.  Why  was  this  desired  ? 

Mainly  that  debtors  might  take 

advantage  of  the  situation  and  pay 
off  existing  obligations,  calling  for 
dollars,  in  coins  shrunk  in  value 
below  the  gold  standard. 

77.  Would  not  this  scheme  vio¬ 
late  the  essential  elements  of  good 
faith  ? 

Doubtless  it  would,  but  there  was 
throughout  the  country  a  numerous 
and  noisy  class  who  had  advocated 
the  payment  of  the  interest-bearing 
public  debt  in  the  depreciated  notes 


48 


A  COIN  CATECHISM. 


of  the  government  dollar  for  dollar, 
with  no  provision  for  the  redemp¬ 
tion  of  the  notes,  and  this  class,  de¬ 
feated  at  the  polls,  was  only  too  glad 
for  a  plausible  opportunity  to  advo¬ 
cate  any  scheme  which  savored  of 
repudiation,  public  or  private. 

78.  In  what  section  of  the  coun¬ 
try  did  the  advocates  of  silver  find 
most  adherents  ? 

Naturally  in  the  silver-producing 
states  where  the  voters  could  be 
made  to  believe  that  the  legislation 
had  been  adverse  to  their  local  in¬ 
terests,  but  in  other  sections  many 
joined  in  the  advocacy  of  a  restora¬ 
tion  of  free  silver,  who  were  restless 
and  dissatisfied  with  their  party 
affiliations  and  were  looking  for  an 
excuse  for  leaving  their  old  party. 

79.  As  silver  dollars  were  being 
coined  for  exportation  at  the  time 


A  COIN  CATECHISM. 


49 


of  the  passage  of  the  act,  did  not  the 
silver-producing  states  have  some 
cause  of  complaint  in  being  debarred 
from  this  privilege  in  the  future  ? 

The  right  of  an  owner  to  have  his 
silver  bullion  treated  at  the  mint  so 
as  to  be  put  in  merchantable  form 
free  of  expense  to  him,  was  not  con¬ 
templated  in  any  coinage  act.  Fur¬ 
thermore,  the  fact  that  any  man  or 
any  class  of  men  had  enjoyed  for  a 
long  period  a  lucrative  privilege 
never  intended  to  be  granted,  by 
which  great  gain  had  arisen  at  the 
expense  of  the  Government,  i.  e. ,  of 
other  fellow-citizens,  affords  no  just 
claim  for  its  continuance. 

80.  Was  not  the  authority  for 
coinage  of  trade  dollars  favorable*  to 
the  silver  producers  ? 

It  was.  Under  it  the  mint  was  au¬ 
thorized  to  receive  deposits  of  silver 


50 


A  COIN  CATECHISM. 


bullion,  to  part  and  refine  and  coin 
them,  but  to  coin  only  in  so-called 
“trade  dollars”  containing  420 
grains  of  silver  9-10  fine  instead  of 
412^  as  in  the  old  dollar,  the  depos¬ 
itors  to  pay  the  expenses,  and  this 
was  all  the  silver  states  asked  for. 

81.  In  what  way  was  the  manu¬ 
facture  of  these  coins  any  advan¬ 
tage  to  the  silver  producer  ? 

It  enabled  him  at  a  slight  charge 
to  have  his  bullion  assayed  and 
stamped  by  the  government  setting 
forth  its  weight  and  fineness,  and 
purchasers  would  accept  the  bullion 
thus  stamped  without  question,  thus 
giving  it  an  advantage  over  the 

other  forms  of  bullion. 

* 

82.  What  became  of  these  dol¬ 
lars  ? 

They  were  mainly  exported  as 
intended. 


A  COIN  CATECHISM. 


51 


83.  How  many  were  coined  ? 

3S.965>924  pieces. 

84.  When  did  their  coinage  stop  ? 

Practically  in  1879. 

85.  Why  was  not  their  fabrica¬ 
tion  continued  if  at  no  expense  to 
the  government  ? 

The  unexpected  depreciation  in 
the  price  of  silver  bullion  rendered 
the  value  of  the  piece  less  than  a 
dollar  in  gold  and  depositors  took 
advantage  of  this  condition  to  place 
the  dollars  in  circulation  instead  of 
exporting  them.  Consequently  the 
Secretary  of  the  Treasury  stopped 
their  coinage  as  he  was  authorized 
by  law  to  do. 

86.  How  many  standard  silver 
dollars  had  been  coined  for  deposi¬ 
tors  previous  to  1873? 

Only  8,031,238. 

87.  Then  under  one  of  the  provi- 


52 


A  COIN  CATECHISM. 


sions  of  the  demonetization  act  of 
1873,  more  than  four  times  the 
amount  of  trade  dollars  was  coined 
for  depositors  in  six  years  than  had 
been  coined  of  standard  dollars  in 
the  80  years  previous  under  the  free 
coinage  acts  of  1792  and  1834? 

Yes,  and  that  of  itself  should  dis¬ 
prove  any  charge  of  intentional  ill- 
treatment  of  the  silver-producing 
states.  These  states  asked  for  the 
trade  dollar  in  lieu  of  the  standard 
dollar;  they  got  it,  and  but  for  un¬ 
foreseen  conditions  would  have  had 
it  to-day. 

88.  Did  they  continue  to  ask  for 
a  restoration  of  the  free  coinage  of 
silver  after  the  coinage  of  trade 
dollars  was  prohibited  ? 

They  did,  but  the  price  of  silver 
had  so  greatly  depreciated  that  their 
demand  was  not  answered. 


A  COIN  CATECHISM. 


53 


89.  But  the  standard  silver  dollar 
is  now  in  circulation;  how  has  its 
coinage  been  brought  about  ? 

By  an  act  passed  February  28, 
1878,  over  a  veto  of  the  President, 
the  Secretary  of  the  Treasury  was 
authorized  and  directed  to  purchase 
not  less  than  two  million  nor  more 
than  four  million  dollars  worth  of 
silver  per  month  and  to  coin  it  into 
silver  dollars  of  the  fineness  and 
weight  of  those  coined  previous  to 

1873- 

90.  Then  silver  dollars  coined 
since  1878  are  practically  only  sub¬ 
sidiary  coins  ? 

To  a  certain  extent  yes,  but  their 
issue  was  compulsory  and  they 
were  of  full  legal  tender,  and  certifi¬ 
cates  for  their  deposit  were  also  to 
be  issued  which  the  government 
would  accept  in  payment  of  any 


54 


A  COIN  CATECHISM. 


dues,  by  which  they  readily  passed 
as  money,  qualities  not  given  to  sub¬ 
sidiary  coins. 

91.  Were  the  silver  dollars  them¬ 
selves  generally  acceptable  to  the 
public  ? 

They  were  not.  Of  the  two,  the 
certificates  were  preferred. 

92.  In  what  were  the  certificates 

redeemable  ?  * 

In  silver  dollars  only.  The  cer¬ 
tificate  reads:  “This  certifies  that 
there  has  been  deposited  in  the 

Treasury  of  the  United  States  - 

silver  dollars  payable  to  bearer  on 
demand,”  but  under  an  act  passed 
July  14,  1890,  the  Treasury  redeems 
them  in  gold. 

93.  What  were  the  provisions  of 
this  act  ? 

The  Treasury  was  directed  to 
purchase  every  month  $4,500,000 


A  COIN  CATECHISM. 


55 


fine  ounces  of  silver,  paying  for  it  in 
“notes”  which  notes  were  made  a 
legal  tender  for  all  debts  public  and 
private  unless  otherwise  specifically 
stated  in  the  contract,  and  were  re¬ 
deemable  in  either  gold  or  silver  at 
the  discretion  of  the  Secretary  of 
the  Treasury,  Congress  declaring  it 
“  the  established  policy  of  the 
United  States  to  maintain  the  two 
metals  on  a  parity  with  each  other 
upon  the  present  legal  ratio,  or  such 
ratio  as  may  be  provided  by  law.” 
So  much  of  the  act  of  1878  as  re¬ 
quired  the  purchase  of  silver  and 
coining  it  into  dollars  was  repealed. 

94.  Is  this  act  still  in  force  ? 

Its  silver -purchasing  provisions 
were  repealed  in  1893. 

95.  What  amount  of  silver  certifi¬ 
cates,  Treasury  notes  and  silver 
coin  issued  under  these  two  acts  is 


56 


A  COIN  CATECHISM. 


now  (1895)  outstanding  and  outside 
of  the  Treasury  ? 

Of  silver  coin  $52,812,570,  of 
silver  certificates  $312,553,171,  and 
of  Treasury  notes  $117,954,807,  a 
total  of  $492,320,548. 

96.  How  much  gold  is  in  circula¬ 
tion  outside  of  the  Treasury  ? 

Only  $483,770,430. 

97.  How  much  silver  was  pur¬ 
chased  under  the  two  acts  and  at 
what  rate  ? 

The  amount  will  be  shown  by  the 
following  table: 


Act  Authoriz¬ 
ing. 

Fine  Ounces. 

Cost. 

Average 
Cost 
Per  Oz. 

Feb.  28,  1878 
July  14,  1890 

291,272,019 

168,674,682 

$308,299,261 

155,931,002 

$1,058 

.924 

1  Otcil  1  *  •••<> 

459,946.701 

464,230,263 

1.009 

98.  Then  under  the  operation  of 
the  two  acts  more  silver  is  in  cir¬ 
culation  than  gold? 


A  COIN  CATECHISM. 


57 


Yes,  considerably  more,  not  in¬ 
cluding  $60,000,000  of  subsidiary 
silver. 

99.  And  all  this  silver  is  redeem¬ 
able  in  gold? 

Yes,  at  the  demand  of  the  holder, 
otherwise  the  “parity”  of  the  two 
metals  would  not  be  maintained  as 
required  by  law. 

100.  What  reserve  has  the  law 
provided  from  which  to  meet  these 
redemptions? 

None  at  all. 

1 01.  Is  no  silver  ever  presented 
for  redemption  ? 

Yes,  millions  of  it,  and  it  is  re¬ 
deemed,  too. 

102.  Where  does  the  Treasury  get 
its  gold  for  this  purpose? 

It  takes  gold  from  the  fund  of 
$100,000,000  accumulated  by  the 
sale  of  bonds  in  1878  to  meet  the 


58 


A  COIN  CATECHISM. 


redemption  of  United  States  notes 
on  and  after  January  i,  1879. 

103.  What,  then,  are  the  total 
obligations  against  this  fund  ? 

Of  silver  as  above  stated  $492,- 
320,548,  and  of  United' States  notes 
$346,681,016,  a  total  of  $839,001,- 
564,  and  in  addition  to  that  the  fund 
is  held  liable  to  be  used  in  current  dis¬ 
bursements  to  an  unlimited  amount 
and  it  has  been  so  used  whenever 
necessary. 

104.  Is  not  this  a  small  reserve 
for  so  many  obligations  ? 

It  is  and  it  would  be  utterly  in¬ 
adequate,  but  that  it  can  be  re¬ 
plenished  at  any  time  by  the  further 
sale  of  bonds  for  gold. 

105.  Have  any  bonds  been  sold 
for  this  purpose  since  1879? 

Yes,  about  $162,000,000  of  5  and 
4  per  cent,  bonds. 


A  COIN  CATECHISM. 


59 


106.  If  the  income  of  the  gov¬ 
ernment  should  equal  or  exceed  its 
expenditures  would  not  that  remove 
an  important  liability  against  this 
reserve  ? 

It  would,  and  probably  allay  any 

¥ 

apprehension  of  the  ability  of  the 
government  to  maintain  the  parity 
in  value  between  the  two  metals  as 
required  by  law. 

107.  Then  is  it  true  that  since 
the  alleged  demonetization  of  silver, 
nearly  $500,000,000  of  it  has  been 
put  into  circulation  and  maintained 
there  at  a  parity  of  value  with 
gold  ? 

It  is,  and  it  is  generally  admitted 
that  the  plan  adopted  is  the  only 
one  feasible  by  which  the  two  metals 
can  be  made  to  circulate  together. 

108.  If  nearly  500,000,000  of 
silver  dollars  has  been  put  into  cir- 


60 


A  COIN  CATECHISM. 


dilation  within  17  years  under  a 
restricted  coinage  and  maintained 
there  as  stated,  against  a  total  specie 
circulation  of  less  than  $8,000,000  of 
our  own  coins  after  60  years  under 
free  coinage,  has  not  the  plan  of 
restricted  coinage  been  more  to  the 
interest  of  producers  of  silver  than 
was  the  free  coinage  system? 

It  would  seem  so  from  the  results 
shown. 

109.  Should  free  coinage  at  the 
ratio  of  16  to  1  be  re-established 
what  would  become  of  the  gold  in 
circulation  ? 

Doubtless  it  would  be  mainly  ex¬ 
ported. 

no.  In  return  for  what  ? 

Public  and  corporation  securities 
of  which  there  is  an  estimated 
amount  held  abroad  of  more  than 
$2,000,000,000. 


A  COIN  CATECHISM. 


61 


hi.  Why  will  they  be  returned? 

Because  the  holders,  knowing 
that  the  obligations,  when  due,  will 
be  paid  in  silver,  will  dispose  of 
them  immediately  at  best  rates  ob¬ 
tainable  in  gold. 

1 12.  With  our  $484,000,000  of 
gold  taken  from  the  circulation,  by 
what  will  it  be  replaced  ? 

Probably  in  time  by  silver,  but  as 
the  average  price  of  that  metal  in 
gold  for  1894  was  somewhat  less 
than  50  cents  for  a  dollar  there  will 
be  needed  for  silver  double  the 
amount  of  silver  dollars  there  was 
of  gold  coin  to  equalize  the  value, 
or,  say  $968,000,000  of  silver. 

1 13.  How  long  would  it  take  the 
mints  of  the  United  States  working 
at  their  full  capacity,  to  coin  that 
amount  ? 

As  the  maximum  capacity  of  the 


62 


A  COIN  CATECHISM. 


mints  is  only  about  $45,000,000  per 
annum  (in  silver  dollars)  it  would 
take  a  little  more  than  20  years. 

1 14.  Would  not  a  change  to  a 
silver  basis  then  at  a  ratio  of  16  to 
1  cause  a  violent  reduction  in  the 
outstanding  circulation  of  money  in 
the  country? 

It  would  ;  not  only  must  the 
vacuum  caused  by  the  disappearance 
of  gold  be  supplied,  but  there  is  at 
present  about  $750,000,000  of  notes 
circulating  at  a  gold  valuation; 
these  if  redeemable  only  in  silver 
would  at  once  lose  one-half  of  their 
present  purchasing  power,  requiring 
an  increase  of  like  amount  in  face 
value  to  keep  the  value  of  our  cir¬ 
culation  unimpaired. 

1 15.  And  to  put  silver  coins  in 
their  place  would  require  seven  or 
eight  years  perhaps  ? 


A  COIN  CATECHISM. 


63 


Yes;  perhaps,  however,  the  capa¬ 
city  of  the  mint  might  be  increased 
or  notes  be  issued  upon  silver  bul¬ 
lion,  but  at  best  there  would  be 
for  awhile  a  sudden  contraction  of 
the  currency,  disturbing  business, 
checking  prosperity,  throwing  thou¬ 
sands  out  of  employment,  thus  pro¬ 
voking  disturbance  the  end  of  which 
no  one  can  forsee. 

116.  But  would  not  owners  of 
silver  mines  reap  a  profit  from  an 
enhanced  price  of  silver  consequent 
upon  the  new  demand  of  that  metal 
for  circulation  ? 

They  doubtless  expect  to,-  and 
until  the  channels  of  circulation  are 
supplied  as  needed,  and  prices  shall 
have  become  adjusted  to  the  new 
standard,  they  would  probably  reap 
some  advantage,  but  it  must  be  re¬ 
membered  that  no  increase  of  wealth 


64 


A  COIN  CATECHISM. 


in  the  aggregate  can  accrue  from 
such  a  source.  What  the  owners  of 
silver  mines  gain  in  the  confusion, 
others  must  lose. 

1 1 7.  Will  not  foreign  exchanges 
continue  to  be  made  in  terms  of 
gold? 

They  will,  and  the  result  will  be 
the  re-establishment  at  New  York 
of  a  Gold  Board. 

1 18.  What  necessity  for  that? 

Because  exchanges  are  effected  in 

this  way:  A  Liverpool  cotton  mer¬ 
chant  telegraphs  a  New  York  Com¬ 
mission  House:  “If  you  can  buy  one 
thousand  bales  of  midland  cotton  so 
as  not  to  cost  me  more  than  1 5  cents 
gold  per  pound  laid  down  in  Liver¬ 
pool,  you  may  do  so.”  The  coinmis- 
„  sion  merchant  finds  foreign  insur¬ 
ance  and  other  charges  will  be  about 
2  cents.  He  wants  1  cent  profit  and 


A  COIN  CATECHISM. 


65 


can  therefore  afford  to  give  12  cents 
gold  for  the  cotton  itself.  He  goes 
into  the  cotton  market  and  learns 
that  cotton  is  quoted  only  in  silver; 
that  the  planters  of  the  south  pay 
their  laborers  and  buy  their  provi¬ 
sions  and  agricultural  implements 
in  silver  and  they  cannot  tell  what 
their  cotton  is  worth  in  gold.  In 
silver  cotton  can  be  bought  for  24 
cents  a  pound,  and  the  next  inquiry 
is  to  ascertain  the  price  of  silver  so 
as  to  know  how  much  in  that  metal 
he  can  afford  to  pay  for  the  cotton 
that  he  may  fill  the  order  of  his 
Liverpool  correspondent  as  desired. 
He  finds  gold  selling  at  a  premium 
in  silver  of  100  per  cent,  in  other 
words  a  dollar  in  gold  is  worth  $2  in 
silver.  At  this  rate  he  can  fill  the 
order,  twelve  cents  in  gold  being 
equivalent  to  24  cents  in  silver. 


66 


A  COIN  CATECHISM. 


Thus  far  the  transaction  is  simple 
enough.  He  has  only  to  exchange 
his  gold  for  silver  and  pay  for  his 
cotton.  But  the  Liverpool  merchant 
has  not  sent  the  gold.  It  will  be 
several  days  before  the  cotton  will 
be  ready  for  shipment  and  not  until 
it  is  aboard  the  vessel  can  he  receive 
an  advance  upon  it.  Meanwhile 
the  rate  of  silver  may  vary  ad¬ 
versely  to  him  perhaps  wiping  out 
his  profits  or  even  incurring  for  him 
.  a  new  liability.  This  is  a  risk  he 
does  not  wish  to  take,  but  it  will  be 
taken  at  the  Gold  Board,  the  mem¬ 
bers  of  which  make  it  a  business  to 
gamble  in  the  price  of  gold  measured 
by  silver.  He  goes  there  and  finds 
that  he  can  contract  for  the  delivery 
of  the  gold  in  silver,  one  for  two,  for 
a  commission  of  %  of  one  per  cent 
in  addition  to  the  ordinary  exchange 


A  COIN  CATECHISM. 


67 


rate,  any  time  within  30  days.  This 
commission  he  cannot  afford  to  pay 
so  he  resumes  negotiations  with  the 
cotton  broker  and  finally  gets  him 
to  consent  to  accept  for  his  cotton 
that  per  cent  less.  He  will  then 
have  no  further  trouble  in  consum¬ 
mating  the  transaction.  But  the 
fact  that  the  New  York  standard 
was  different  from  that  of  Liverpool 
compelled  the  producer  of  cotton  to 
suffer  a  loss  of  %  of  one  per  cent  to 
guarantee  the  gold  broker  against  a 
depreciation  within  30  days  of  the 
price  of  silver. 

1 19.  Would  this  commission 
amount  to  any  considerable  sum  ? 

The  total  value  of  our  exports 
for  1894  was  $892,140,572,  and  % 
of  one  per  cent  of  this  amount 
would  be  $2,230,351,  which  amount 
would  be  paid  to  New  York  brokers 


68 


A  COIN  CATECHISM. 


by  our  producers  of  goods  for  ex¬ 
portation. 

120.  But  if  meanwhile  the  price 
of  silver  should  be  enhanced  would 
not  the  New  York  broker  make  a 
profit  to  the  extent  of  the  increase  ? 

He  would,  and  that  is  what  he 
calculates  upon.  He  charges  the 
percentage  to  guard  against  possible 
loss;  he  takes  for  himself  all  possible 
gain,  for  the  New  York  broker  has 
an  unearned  reputation  for  money 
making  if  in  such  a  deluge  of  larks 
his  dish  is  found  bottom  side  up. 

12 1.  You  assume  then  that  with 
free  coinage  of  silver,  under  present 
conditions,  cotton  would  advance  in 
price  from  12  cents  per  pound  as  in 
1890  to  24  cents  ? 

Yes,  there  can  be  no  doubt  that 
such  would  be  the  relative  advance. 

122.  Is  not  this  just  what  the  ad- 


A  COIN  CATECHISM. 


69 


vocates  of  free  silver  claim  would 
result  ? 

Yes,  but  they  maintain,  or  at 
least  some  of  them  do,  that  silver 
will  circulate  with  gold  at  par 
under  the  coinage  ratio  of  16  to  i. 
Should  such  be  the  result  there 
would  be  no  special  objection  to  the 
free  coinage  desired,  but  no  such 
result  is  possible,  as  I  have  already 
shown  and  as  is  now  generally  ad¬ 
mitted,  and  without  it  the  apparent 
increase  in  value  would  be  fictitious. 

123.  But  is  not  cotton  at  24  cents 
better  for  the  producers  than  cotton 
at  12  cents  per  pound? 

Not  necessarily.  If  a  farmer  sells 
his  wheat  for  francs,  five  of  them  to 
a  dollar,  he  will  get  five  times  as 
many  pieces  for  it  as  he  would  if 
paid  in  dollars,  but  he  gets  no  more 
in  value,  and  24  cent  cotton  in  sil- 


70 


A  COIN  CATECHISM. 


ver  is  not  necessarily  one  wliit  bet¬ 
ter  for  the  producer  than  12  cent 
cotton  in  gold.  The  only  way  the 
producer  can  get  an  increase  for  his 
cotton  is  to  have  an  advance  in  the 
price  without  a  decrease  of  standard; 
then  he  secures  an  actual  advance. 

124.  But  it  is  alleged  that  under 
a  gold  standard  the  prices  of  com¬ 
modities  have  depreciated  greatly 
to  the  injury  of  producers  and  that 
the  restoration  of  free  silver  with  its 
increase  of  prices  would  be  only  just 
to  that  class.  Is  such  the  case? 

In  the  matter  of  depreciation  of 
prices  of  course  we  might  in  any 
event  naturally  look  for  a  lowering 
in  those  of  agricultural  products, 

owing  to  greatly  improved  methods 

* 

and  machinery  employed.  The 
investigation  of  the  nth  census 
shows  that  in  preparing  ground  for 


A  COIN  CATECHISM. 


71 


cereals  one  man  through  new  de¬ 
vices  can  do  the  former  work  of 
two  and  in  gathering  the  crops  one 
can  do  the  work  of  nine.  This  of 
itself  would  naturally  insure  a  reduc¬ 
tion  in  prices  of  farm  products.  Gold 
came  to  be  employed  as  a  standard 
in  1834.  It  took  a  few  years  before 
its  coins  furnished  the  circula¬ 
tion  of  the  country,  but  under  its 
employment  prices  of  farm  products 
have  increased,  not  diminished,  as 
will  be  seen  by  the  following  table, 
which  shows  the  prices  of  the  prin¬ 
cipal  agricultural  products  for  1840 
and  at  the  end  of  each  succeeding 
decade,  omitting  1870  when  prices 
were  inflated  by  the  civil  war  and 
a  depreciated  currency. 

The  figures  of  the  following  table 
have  been  taken  from  a  report  of 
the  Senate  Finance  Committee  on 


72 


a  COIN  CATECHISM. 


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A  COIN  CATECHISM. 


73 


Wholesale  Prices  and  Wages,  1893, 
and  their  accuracy  has  never  been 
questioned.  It  will  be  seen  that 
notwithstanding  the  introduction  of 
labor-saving  appliances  there  has 
been  an  increase  in  the  price  of  all 
the  principal  farm  products  during 
the  50  years  in  question  and  yet  all 
this  time  the  country  was  on  a  gold 
basis,  and  the  products  were  in 
every  case  measured  by  gold. 
Wheat,  whose  recent  depreciation 
in  value  has  been  attributed  to  the 
fall  in  silver,  was  worth  nearly  three 
times  as  much  per  bushel  in  1890 
as  it  was  in  1840,  and  nearly  double 
what  it  was  in  1850,  measured  by 
eold.  There  is  no  truth  in  the  alle- 
gation  that  prices  of  farm  products 
have  been  depreciated  under  the 
employment  of  a  gold  standard. 

125.  What  change,  if  any,  has 


74 


A  COIN  CATECHISM. 


taken  place  in  the  price  of  manu¬ 
factured  articles  during  the  same 
period  ? 

Prices  of  such  articles  have  de¬ 
creased  as  everybody  desired,  ren¬ 
dering  the  cost  of  living  much  less 
in  1890  than  it  was  in  1840.  They 
are  shown  in  the  same  report  for 
each  year  since  1840,  also  the  rela¬ 
tive  average  of  prices,  i860  being 
reckoned  as  100.  The  figures  of 
such  averages  shown  below  are  for 
the  same  dates  as  those  in  previous 
table: 


Class 

1840 

1850 

1860 

1880 

1891 

Cloths  and  clothing . 

$111 

$91 

$100 

$91 

$81 

Fuel  and  lighting . 

396 

103 

100 

100 

91 

Metals  and  implements . 

124 

115 

100 

96 

74 

Drugs  and  chemicals . 

146 

124 

100 

113 

86 

House  furnishing  goods . 

116 

126 

100 

85 

70 

Miscellaneous . 

147 

107 

100 

109 

95 

It  will  be  seen  that  the  wage- 
earner,  for  whose  welfare  the  free 
silver  advocates  are  so  solicitous, 


A  COIN  CATECHISM. 


pays  28  per  cent  less  for  his  cloths 
and  clothing;  80  per  cent  less  for 
his  fuel  and  lighting;  40  per  cent 
less  for  metals  and  implements;  42 
per  cent  less  for  drugs  and  chemi¬ 
cals;  40  per  cent  less  for  house  fur¬ 
nishing  goods,  and  35  per  cent  less 
for  miscellaneous  items  in  1891  than 
he  paid  in  1840. 

126.  Does  not  labor  enter  very 
largely  as  an  element  of  cost  into 

f 

each  manufactured  article  ? 

Yes,  the  cost  of  labor  constitutes 
nearly  one-third  of  the  value  of 
manufactured  products. 

127.  Then  if  these  products  have 
been  so  reduced  in  price  has  their 
reduction  not  been  at  the  expense  of 
the  wage-earner — has  not  his  wages 
been  reduced? 

O,  no;  on  the  contrary  they  have 
greatly  advanced.  The  report  in 


76 


A  COIN  CATECHISM. 


question  shows  61  series  of  wage 
returns,  beginning  as  early  as  1840, 
and  540  series  from  i860  to  1891. 
These  extended  back  to  1840  are 
mostly  of  New  York  or  Boston 
firms.  Below  are  given  a  few 


Occupations. 


Building  Trades  — 

Plasterers . 

Roofers  and  slaters . 

Blacksmiths. . 

Blacksmiths’  helpers . 

Painters . 

Wheelwrights . 

Cotton  Goods — 

Card  grinders . 

Card  Strippers., . 

Carpenters . 

Drawing  hands. . 

Engineers . 

Firemen . 

Laborers . . 

Machinists . 

Overseers . 

Watchmen . 

Railroads — 

Baggagemen . 

Brakemen,  freight . 

Brakemen,  passenger . 

Carpenters . 

Conductors,  freight . 

Conductors,  passenger . 

Engineers,  locomotive . 

Firemen,  locomotive . 

Foremen,  masons . 

Painters . 

Average,  according  to  im¬ 
portance  for  all  occupa¬ 
tions — 1860  being  reck¬ 
oned  as  100 . 


1840 

1850 

I860 

1G80 

1S90 

$1.50 

$1.75 

$1 

75 

$2.00 

13.50 

1.50 

1.50 

1 

.25 

2.50 

3.50 

1  50 

1.50 

1 

.50 

3  00 

3.00 

0.83 

.83 

.83 

1.75 

1  75 

1.25 

1.25 

1 

.25 

1.75 

2.50 

1.25 

1.25 

1 

25 

2..50 

2.50 

.80 

.92 

.92 

1.52 

1  52 

.50 

.79 

75 

.93 

1  02 

1  29 

1.41 

1 

.52 

1.81 

1  94 

.41 

.45 

.50 

.67 

1.04 

2.00 

2.25 

3 

00 

3.50 

4.25 

1.25 

1.37 

1 

.44 

1  40 

1.65 

.81 

1 .04 

.99 

1.16 

1.25 

1 .45 

1  55 

1 

.76 

2  08 

2.19 

2.00 

2.00 

O 

& 

.25 

3  00 

5  00 

1.10 

1.06 

1 

.00 

1.50 

1.55 

1.53 

1  53 

1 

91 

2.10 

2.11 

1.00 

1.00 

1 

.16 

1.75 

1.85 

1  15 

1.15 

1 

25 

2.00 

2.00 

1.22 

1.33 

1 

.30 

1.77 

2  00 

1.66 

1.68 

1 

.61 

2.58 

2.57 

2  11 

2.30 

3 

.19 

3.45 

3  81 

2.14 

2.15 

2 

.30 

3.78 

3  79 

1.06 

1.15 

2 

00 

2.00 

2.00 

2.50 

2.50 

2 

.50 

4.00 

4  10 

1 .5  u 

1.42 

1 

.42 

1.87 

2.17 

87.7 

92.7 

100. 

143. 

168  6 

A  COIN  CATECHISM. 


(  i 

samples  atid  the  general  results. 
The  figures  are  per  diem  rates  for 
every  tenth  year,  beginning  with 
1840,  except  for  1870,  which  are 
omitted  for  reasons  before  stated. 

Commenting  upon  this  result  the 
committee  says:  “The  advance  in 
daily  wages  which  has  been  here 
noted,  has  been  accompanied  by  a 
decrease  in  the  hours  of  labor.  Com¬ 
pared  with  1840,  hourly  wages  in 
1891  stood  at  209.0  and  compared 
with  i860  at  176.8.” 

In  other  words  the  average  wages 
of  all  occupations  have  more  than 
doubled  since  1840  and  have  in¬ 
creased  76.8  per  cent  since  i860, 
and  that  without  any  change  from 
the  gold  standard. 

128.  But  it  is  alleged  that  re¬ 
cently,  say  since  1873,  there  has 
been  a  great  increase  of  debt  in  the 


V 


78  A  COIN  CATECHISM. 

United  States  thus  involving  the 
wealth  of  the  country  to  the  advan¬ 
tage  of  the  creditor  class ;  is  that  true? 

There  is  no  record  of  debts  exist- 

* 

ing  in  the  country  previous  to  1890 

* 

except  those  incurred  by  the  Na¬ 
tional,  State  and  local  governments. 
The  total  and  per  capita  at  the  end 
of  the  three  last  decades  were  as  fol¬ 
lows: 


Year. 

Total. 

Per  Capita. 

1870 

$3,379,253,997 

92.80 

1880 

3,045,796,011 

60.73 

1890 

2,027,170,546 

32.37 

Instead  of  an  increase  in  these 
debts,  there  has  been  such  a  de¬ 
crease  that  the  per  capita  burden  in 
1890  was  only  about  one-third  as 
great  as  in  1870. 

,  129.  It  is  also  alleged  that  owing 
to  a  lack  of  circulation  arising 


A  COIN  CATECHISM 


79 


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80 


A  COIN  CATKCHISM. 


from  the  demonetization  of  silver, 
the  prosperity  of  the  country  has 
been  checked.  What  do  the  figures 
show  ? 

The  foregoing  table  will  show 
you  at  a  glance  the  wealth  and  pro¬ 
duction  of  the  United  States  for 
each  decade  since  1850  (1870  ex¬ 
cepted  as  before)  as  published  by 
the  United  States  Census  office,  and 
the  amount  of  savings  banks  de- 

0 

posits  as  shown  by  the  Report  of 
the  Comptroller  of  the  Currency, 
at  same  dates. 

It  will  be  seen  that  production 
and  valuation  have  increased  with 
every  decade  since  1840,  the  per 
capita  of  wealth  being  more  than 
three  times  greater  in  1890  than  in 
1840. 

130.  In  what  way  is  this  increase 
of  wages,  decrease  in  cost  of  living 
and  greatly  increased  wealth  shown? 


A  COIN  CATECHISM. 


81 


It  is  seen  in  the  piano,  the  carpet 
and  the  silk  dress  which  have  come 
to  the  homes  of  the  farmer  and 
wage-earner ;  in  the  increase  of 
books,  pictures  and  tidy  surround¬ 
ings  of  every  home;  in  the  cheap¬ 
ened  transportation,  by  which  farm 
products  are  brought  to  markets 
thousands  of  miles  distant  at  rates 
less  than  from  an  adjoining  county 
fifty  years  ago;  in  the  increased  fa¬ 
cilities  for  personal  travel,  by  which 
rates  and  time  have  been  reduced 
two-thirds  and  the  comfort  of  a  par¬ 
lor  substituted  for  a  seat  in  a  spring¬ 
less  wagon  over  a  rough  road;  in 
the  reduced  hours  of  labor,  by  which 
the  wage-earner  can  spend  with  his 
family  or  in  rest  more  than  one- 
third  of  the  time  he  was  formerly 
employed  in  the  factory  or  field, 
and  yet  have  75  per  cent  more 
money  to  spend  on  comforts  or  lux- 


82 


A  COIN  CATECHISM. 


uries  which  fifty  years  ago  were 
known  only  to  the  wealthy;  in  the 
facilities  for  the  education  of  chil¬ 
dren,  public  schools  for  which  pur¬ 
pose  of  the  highest  order  being  now 
within  reach  of  every  child  in  the 
country  of  whatever  color  or  condi¬ 
tion;  in  the  better  and  more  abun¬ 
dant  food;  in  the  removal  of  many 
of  the  burdens  which  made  life  two 
generations  ago  heavy  and  hard  to 
endure.  Whatever  may  be  the 
cause,  there  is  no  mistaking  the  re¬ 
sult — the  condition  of  the  masses  of 
our  people  has  greatly  improved 
within  the  last  fifty  years. 

1 31.  What  are  the  principal 
countries  having  a  silver  standard 
and  employing  silver  coin  for  cir¬ 
culation  ? 

Mexico,  Japan,  China  and  India. 

132.  Have  we  any  statistics  show¬ 
ing  rate  of  wages  or  price  of  prod- 


A  COIN  CATECHISM 


83 


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fl  *J  Irt 

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tn  T3  j? 
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o  *-> 

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*  In  favor  of  Mexico, 


S4 


A  COIN  CATECHISM. 


ucts  in  those  countries,  and,  if  so, 
how  do  they  compare  with  those  of 
the  United  States  ? 

Very  little  information  of  the 
kind  is  obtainable,  but  from  a  pub¬ 
lication  of  the  11  Bureau  of  Ameri¬ 
can  Republics”  I  have  compiled 
the  table  on  page  83,  showing  prices 
of  commodities  in  Mexico  in  1890 
compared  with  the  prices  of  those 
in  the  United  States  at  the  same 
time. 

It  will  be  seen  that,  excepting 
beans  and  coffee,  prices  of  articles 
mentioned  were  higher  in  Mexico 
than  in  the  United  States,  compared 
with  the  same  standard. 

Wages  at  the  same  time  were,  in 
every  occupation,  reported  much 
lower,  as  will  be  seen  by  the  fol- 
lowing  table,  compiled  from  the 
same  publication. 


A  COIN  CATECHISM 


85 


Difference  in 
favor  of 
United  States. 

IMNIMOJCOOSONOOIOOMCON 
CO  ■'f  t— i  OiONCONOOiOCOHCOO) 

O  rH  rH  CO  C^l  rH  rH  r-H  rH  rH  03  rH  03 

Wages  in 
United  States 
Per  Day. 
Gold  Coin 
or  its 

Equivalent. 

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iCiOiOOOiO’tMQiOLOMIN'^t-O 

C<IC<irHCOCO(MC<li-ICM(MrHCO<MCO<M 

m 

cJ 

p 

w 

43 

ft 

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U 

'3 

Equivalent  in 
U.  S.  Gold 
Coin. 

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aHCOt'-ro®osi>io»ON03o:HH 

t— •  i-H  rH  rH  rH  rH  rH 

43 

kr< 

a 

•  rH 

tfi 

<L> 

b/3 

cl 

£ 

Mexican 

Silver 

Dollar, 

lO 

oooo>or^ioooootc»ooo 

lOiOiOO(NOOlNOOOO(NNiOiO 

03  rH  rH  rH  rH  rH  03  03  rH  rH  rH  rH  rH 

& 

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•*-> 

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+-> 
•  tH 

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<U  <U 


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r—  cd  a  •  .,_ 

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■ft  o  £  cd  k2  a  • 


l  remen 


86 


A  COIN  CATECHISM. 


There  is  certainly  nothing  in 
these  tables  to  indicate  that  the  la¬ 
boring  man  is  benefited  by  an  un¬ 
limited  supply  of  silver.  The  same 
authority  states  that  the  “peon,” 
the  common  farm  laborer  in  Mexico, 
receives  only  one-fourth  of  a  Mexi¬ 
can  dollar  per  day  for  his  labor; 
that  he  lives  in  an  “adobe”  or  mud 
house,  and  that  all  the  comforts  of 
civilization  are  to  him  unknown. 
As  to  the  condition  of  the  laboring 
man  in  China  we  need  no  statistics. 
To  prevent  the  workingman  of  that 
country  from  coming  here  to  im¬ 
prove  his  condition  we  have  built 

up  a  legislative  wall  higher  and 
stronger  than  the  stone  wall  raised  by 
China  itself  to  prevent  the  invasion 
of  the  Tartars.  Chinese  laborers 
are  more  than  willing  to  quit  a  coun¬ 
try  with  a  silver  standard  to  seek  a 
home  in  the  United  States,  notwith¬ 
standing  it  has  a  gold  standard. 


A  COIN  CATECHISM. 


87 


133.  What  countries  have  only  a 
gold  standard  ? 

Austria-Hungary,  Brazil,  Den¬ 
mark,  Egypt,  German  Empire, 
Great  Britain  and  her  colonies, 
Portugal,  Roumania,  Norway,  Neth¬ 
erlands,  Servia  and  Spain;  while, 
in  fact,  France,  Italy,  Switzerland, 
Turkey,  Belgium  and  Greece  have 
absolutely  closed  their  mints  to  the 
free  coinage  of  silver  and  maintain 
a  circulation  substantially  at  par 
with  gold,  making  the  currency  of 
these  countries,  for  all  practical  pur¬ 
poses,  on  a  gold  basis. 

134.  What  countries  still  attempt 
to  maintain  an  unrestricted  bimetal¬ 
lic  system  ? 

Bulgaria, Chili  and  Russia,  but  the 
last-named  country  has  had  a  depre¬ 
ciated  paper  currency  since  1855, 
which,  owing  to  the  belief  that  it 
will  be  redeemed  in  gold,  is  quoted 


88 


A  COIN  CATECHISM. 


about  twenty  per  cent,  above  that  of 
the  silver  rouble,  and  the  two  other 
countries  are  practically  on  a  silver 
basis. 

135.  Which  of  all  these  countries, 
if  any,  have  tried  the  bimetallic 
system  and  abandoned  it  for  a  single 
gold  standard  ? 

The  German  Empire  abandoned 
the  bimetallic  system  which  had 
existed  for  various  periods  among 
the  several  states,  and  by  the  acts 
of  December,  1871,  and  July,  1873, 
established  a  uniform  gold  mono¬ 
metallic  system  (for  the  Empire), 
coining  silver  only  on  government 
account. 

Great  Britain  tried  the  bimetallic 
system  for  centuries.  In,  1666  it 
was  enacted  that  all  persons  might 
bring  their  gold  and  silver  to  the 
mint  to  be  coined  free  of  charge, 
the  gold  guineas  to  be  reckoned  at 


A  COIN  CATECHISM. 


89 


20  shillings  in  silver,  but  the 
guineas  passed  in  circulation  for  22 
shillings.  The  latter  pieces  were 
reduced  from  time  to  time,  and  so 
were  the  guineas  somewhat,  but  in 
1718,  as  a  result  of  its  coinage  laws, 
England  was  to  all  intents  and  pur¬ 
poses  a  gold  standard  country, 
though  authority  for  its  obsolete  bi¬ 
metallism  remained  upon  its  statute 
books  until  1816,  when  gold  was 
made  the  standard,  silver  subsidiary, 
the  system  now  existing,  and  which 
has  met  with  little  objection  and 
found  much  favor. 

France  also  endeavored  to  main¬ 
tain  bimetalism  from  1113  to  1874, 
and  there  was  no  end  of  effort  to 
make  the  ratio  of  value  between  the 
two  standards  the  same  in  law  that 
it  was  in  the  market.  To  that  end 
the  mint  price  of  gold  was  changed 
146  times,  and  that  of  silver  245 


90 


A.  COIN  CATECHISM. 


times.  In  1726  the  ratio  was  fixed 
at  14)4  of  silver  to  1  of  gold,  but 
this  ratio  proved  too  higli  and  silver 
became  the  standard  of  France 
under  the  same  economic  law  that 
made  gold  the  standard  in  England. 
In  1785  the  ratio  was  fixed  at  15)4 
to  1  and  in  1803  that  ratio  was  re¬ 
affirmed  with  a  thorough  revision  of 
the  mint  laws  authorizing  the  exist¬ 
ing  coins,  but  even  at  this  ratio  gold 
wras  undervalued  and  commanded  a 
premium,  and  from  1803  to  1850 
there  was  no  gold  in  general  circula¬ 
tion  throughout  the  country.  Soon 
after  1850  increased  gold  supplies 
came  from  California  and  Australia, 
changingthe  ratio  of  value  in  France 
from  15)4  to  15)4  to  1.  This  change, 
though  it  may  seem  slight,  was  suf¬ 
ficient  to  displace  more  than  150,- 
000,000  of  silver  and  to  substitute 
an  equal  quantity  of  gold,  showing 


A  COIN  CATECHISM. 


91 


how  a  slight  change  in  the  market 
relation  of  value  between  the  two 
metals  may  displace  one  metal  from 
circulation  and  establish  the  other 
in  its  place. 

In  1865  a  grea-t  dearth  of  silver 
coins  had  resulted  in  France  and  that 
country  entered  into  a  combination 
with  Belgium,  Italy,  Switzerland 
and  Greece,  known  as  the  “Latin 
Union”,  by  which  the  double  stand¬ 
ard  at  ratio  of  1 5  ^  to  1  was  to 
be  maintained,  but  the  free  coin¬ 
age  of  silver  to  be  restricted  to  the 
five  franc  piece,  the  coins  of  less  de¬ 
nomination  to  be  minted  only  on 
government  account,  and  at  reduced 
relative  weight  of  pure  metal,  and 
all  to  be  redeemable  in  gold.  This 
brought  the  desired  relief.  Owing 
to  the  fall  in  the  price  of  silver,  the 
free  coinage  of  that  metal  was  first 
restricted;  then  in  1874  all  silver 


92 


A  COIN  CATECHISM. 


coinage  was  absolutely  suspended 
by  the  contracting  parties,  leaving 
France  and  the  other  countries  in 
the  Union  practically  with  a  gold 
standard.  The  Bank  of  France  to¬ 
day,  however,  keeps  its  gold  only  by 
imposing  a  small  charge  on  large 
payments  of  that  metal. 

Roumania  introduced  the  double 
standard  in  1867,  but  in  1890  sub¬ 
stituted  in  its  place  a  gold  standard. 

■>  Spain  in  1868  introduced  the  bi¬ 
metallic  system  like  that  of  the 
Uatin  Union,  but  since  1878  silver 
has  been  coined  only  on  government 
account,  making  Spain  a  gold  stand¬ 
ard  country. 

136.  If  all  the  nations  mentioned 
and  the  United  States  should  here¬ 
after  continue  to  employ  only  gold 
as  a  standard  of  value,  is  there  not 
a  danger  that  the  increased  use  of 
that  metal  will  enhance  its  price? 


A  COIN  CATECHISM. 


93 


Not  at  all.  The  world’s  annual 
production  of  gold  alone  for  1894 
was  $181,510,100,  against  an  aver¬ 
age  annual  production  of  both  gold 
and  silver  from  1801  to  1810  of 
$48,982,900,  and  from  1831  to  1840 
of  only  $38,271,000.  Then  the  re¬ 
cent  introductiou  into  commerce  of 
a  greatly  extended  use  of  notes, 
checks  and  drafts  has  limited  the 
need  of  actual  coin  in  making  ex¬ 
changes,  and  this  use  can  be  ex¬ 
tended  with  safety  until  coin,  except 
subsidiary  silver,  need  hardly  be 
seen  in  current  transactions. 

137.  But  if  one  country  may  not 
be  able  of  itself  to  maintain  coins 
of  different  market  value  in  circu¬ 
lation  at  the  same  time,  might  not 
all  the  commercial  countries  of  the 
world  agree  upon  a  common  lawful 
ratio  for  the  two  metals  and  main¬ 
tain  it  ? 


94 


A  COIN  CATECHISM. 


Such  an  agreement  would  in  ef¬ 
fect  be  an  attempt  to  fix  a  value 
for  one  of  the  metals  as  measured  by 
the  other  to  extend  throughout  the 
commercial  world  without  regard  to 
the  ever-changing  conditions  of  pro¬ 
duction  and  facilities  of  transporta¬ 
tion.  Suppose  the  ratio  should  be 
fixed  at  1 6  to  i.  Then  every  man 
in  the  world  would  want  16  pounds 
of  silver  just  as  much  as  he  would  i 
pound  of  gold,  or  the  ratio  would  be 
changed  at  once.  The  scheme  can 
not  even  have  a  trial  were  it  feasi¬ 
ble,  for  of  all  the  countries  of 
Europe  having  a  single  gold  stand¬ 
ard  not  one  has  signified  the  slight¬ 
est  desire  to  return  to  any  bi¬ 
metallic  system,  though,  at  the 
instance  of  the  United  States,  four 
international  conventions  have  been 
held  within  20  years,  with  a  view 
to  introducing  such  an  international 


A  COIN  CATECHISM. 


95 


ratio.  The  proposition  is  of  it¬ 
self  chimerical  in  conception  and 
impracticable  in  application.  In¬ 
creasing  a  triangle  does  not  make  it 
a  square,  and  extending  the  opera¬ 
tions  of  an  economic  law  will  not 
change  the  result  of  its  adoption. 
The  law  by  which  the  poorer  money 
drives  the  better  from  circulation  is 
as  unchangeable  as  the  law  of  grav- 
ity  and  coexistive  with  the  universe. 
Under  its  operations  no  matter  what 
laws,  treaties  or  agreements  may  be 
made  by  nations,  fixing  a  common 
ratio,  only  that  metal  which  is  the 
cheaper  will  furnish  the  standard  of 
value  and  supply  coins  for  circula¬ 
tion,  and  this  is  generally  admitted 
even  by  the  advocates  of  free  silver 
coinage. 

138.  Then  you  do  not  believe 
bimetallism  possible  under  any  con¬ 
ditions  or  circumstances  ? 


96 


A  COIN  CATECHISM. 


Not  in  the  sense  of  a  free  coinage 
of  the  two  metals  at  a  ratio  fixed  by 
law.  Such  a  scheme,  wherever  and 
whenever  tried,  has  invariably  re¬ 
sulted  in  maintaining  only  the 
cheaper  metal  as  a  standard  and  the 
metal  to  be  thus  employed  may  as 
well  be  fixed  by  law  at  the  outset, 
leaving  the  other  metal  to  be  adapted 
to  it  by  its  use  as  subsidiary  coins, 
the  only  way  yet  devised  by  which 
the  two  metals  have  ever  been  made 
to  circulate  together  to  any  consid¬ 
erable  extent.  Not  only  is  such  a 
scheme  based  upon  well  known  eco¬ 
nomic  laws,  but  the  fact  that  bimet¬ 
allism  has  been  tried  by  nearly  every 
nation  of  the  world  and  abandoned 
as  impracticable  should  keep  the 
United  States  from  any  such  folly 
as  attempting  its  restoration  through 
any  scheme. 


r  .  ■  r J- 


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